LOOKING EAST
The recent visit of the Saudi monarch to five East Asian states—Malaysia, Indonesia, Brunei, China, and Japan—was like no other.
While the world's mainstream media continued to obsess over the 1,500-strong delegation, 500 tons of equipment, and two limousines accompanying HRH King Salman Bin Abdulaziz on his Asia tour, they glaringly neglected the purposeful and far-sighted vision that Saudi Arabia is testing in Asia: its “Look East” policy.
It is no secret that 2016 brought unprecedented challenges upon the Kingdom. It has witnessed low oil prices eat up USD258 billion from its foreign reserves, a rise in regional tensions fuelled primarily by Iran's reintroduction into the global domain and continued proxy expansionism, and a sense of uncertainty echoing from Washington's new administration.
These challenges have forced the Saudi leadership, led by the Custodian of the Two Holy Mosques and the enthusiastic Crown Prince, HRH Mohammed Bin Salman, to explore fresh opportunities across the Kingdom's sectors, new markets for trade and investment, and an overall foreign policy pivot. And while the month-long Asia tour—the longest of any Saudi monarch—at first glance meets these objectives, it is important to divide these into two separate tranches; that is to say, King Salman's visit to China and Japan satisfied somewhat different goals than his stay in Malaysia, Indonesia, and Brunei.
In April 2016, the Crown Prince famously launched Vision 2030—a broad-based program that is set to revolutionize the economy from within through reforms such as privatization and widespread economic diversification. A major aspect to the latter includes positioning the Kingdom as a global leader in innovation and technology.
The go-to destination for the 31-year-old Prince was Japan, and in October 2016 he committed USD45 billion to Tokyo-based SoftBank's “Vision Fund,” which will invest in the future of technology, including robotics and microchips. As such, King Salman paid the company's CEO, Masayoshi Son, a royal visit during his recent stop to the world's third-largest economy, showing encouraging signs for their bilateral effort to rule the digital waves. More encouraging yet, Japan's Prime Minister, Shinzo Abe, pledged to fully support the Kingdom's effort to diversify its economy by launching a suitably named Japan-Saudi Vision 2030, which will overwhelmingly expand cooperation in energy, manufacturing, and infrastructure.
From China, the message was typically bold, yet equally strategic and comprehensive. On his first day touching down in Beijing, King Salman wasted no time in tying up USD65 billion worth of deals with President Xi Jinping, primarily in the petrochemicals and energy sectors—a key example of the Kingdom's ability to secure game-changing contracts in its core business amidst ongoing uncertainties in energy markets. And China's significance is both fresh and calculated; it comes after a challenging 2016 when the world's second-biggest economy agreed to expand trade with Iran to a whopping USD600 billion, and the Kingdom (1.02 million barrels per day) was overtaken by Russia (1.05 million bpd) as the biggest oil exporter to China. Yet most importantly perhaps is the fact that Saudi's dealings in China are being spearheaded by heavyweights Aramco and SABIC, at a time when Vision 2030 anticipates the former to undergo a historic USD2 trillion IPO (likely part in Hong Kong), and SABIC—the biggest listed company in the Middle East—reaps the benefits of the vision's goals to revolutionize the downstream petrochemical sector.
The remaining stopovers on the Asia tour were likewise marked by highly lucrative and strategic deals, with Aramco's USD7 billion investment in Malaysia's state-owned oil giant Petronas' refinery project leading the pack. Yet, there was a clear, underlying geopolitical purpose in King Salman's visit to Brunei, Malaysia, and Indonesia, the biggest nation in the Islamic world. The fall in oil prices, ongoing conflicts in Yemen and Syria, coupled with an uncertain tone from long-time ally the US, indirectly leading to Iran's emergence onto the global stage, have unarguably taken a toll on the Kingdom's ability to assert itself on the international arena, instead forcing the leadership to look within for answers to its many challenges.
Yet in the spirit of the old Chinese proverb in that every crisis lies the seed of opportunity, King Salman's Asia tour delivered just that. Not only was it a testament that widespread reforms were firmly in place and that a farsighted vision had been set-out, but for anyone seriously doubting Saudi Arabia's international stature, this was a message loud and clear that the Kingdom was more than capable of thriving in the new normal, cultivating groundbreaking bonds with the world's fastest growing economies. The significance of Malaysia, Indonesia, and Brunei in this regard is that despite glaring fractures in the Islamic world, the Custodian of the Two Holy Mosques is continuing to lead the sunnah into this new era of unprecedented opportunities and challenges.
LOOKING EAST
TABLE OF CONTENTS
Column
YB Pehin Dato Lim Jock Seng, Minister at the Prime Minister’s Office & Second Minister of Foreign Affairs and Trade, Brunei
TBY talks to YB Pehin Dato Lim Jock Seng, Minister at the Prime Minister's Office & Second Minister of Foreign Affairs and Trade, Brunei, on the sector.
read articleReview
A Crude Awakening
The Kingdom has made renewables a critical aspect of its ambitious Vision 2030 effort to diversify its economy and wean itself from a strictly carbon-based diet, not to mention empower local businesses and individuals to take up the mantle and lead the energy sector into the next generation.
read articleInterview
Abdulaziz AbdulKarim, Vice President of Procurement & Supply Chain Management (PSCM) , Saudi Aramco,
TBY talks to Abdulaziz AbdulKarim, Vice President of Procurement & Supply Chain Management (PSCM) at Saudi Aramco, on the IKTVA program, supporting local content, and looking back over a successful year.
read articleInterview
Ayman Abdullah Alfallaj, CEO, Thiqah
TBY talks to Ayman Abdullah Alfallaj, CEO of Thiqah, on how the private sector can keep pace with the speed of public reforms, delivering a strong and lasting value proposition, and integrating the fruits of privatization into the public sector.
read articleFocus: Technology Investments
Investment Calling
A technological revolution is underway in the Kingdom. Already one of the most tech-savvy nations in the Middle East, the Saudi market has long sought a thriving domestic technology and innovation scene. And with Vision 2030, it is on course to deliver just that.
read articleReview
A Hejaz Unhindered
An ambitious series of road and rail projects from the Jordanian border down to the Indian Ocean are slated to open in part before the end of 2017. They bring the Kingdom that much nearer to its goal of greater non-carbon-based economic integration with the world.
read articleInterview
Sulaiman bin Abdullah Al-Hamdan, Former Minister of Transport and Minister, Civil Service
TBY talks to Sulaiman bin Abdullah Al-Hamdan, Former Minister of Transport and current Minister of Civil Service, on an attractive legislative framework for investment, railway linkages, and port developments.
read articleInterview
Rumaih M. Al-Rumaih, President, Public Transport Authority (PTA
TBY talks to Rumaih M. Al-Rumaih, President of Public Transport Authority (PTA) & Acting President of Saudi Railway Organization, on teaming up with commercially committed partners, making sure the Kingdom's land and sea bridges are of the first order, and providing employment for all the Kingdom's inhabitants.
read articleInterview
Nabeel M. Al-Amudi, President, Saudi Ports Authority, and Minister of Transport
TBY talks to Nabeel M. Al-Amudi, Minister of Transport, and President of Saudi Ports Authority, on optimally restricting concession agreements, resolving bottlenecks in the logistics chain, and privatizing as rapidly as possible.
read articleInterview
Khaled Bin Abdullah Al Hogail, CEO & Managing Director , Saudi Public Transport Company (SAPTCO)
TBY talks to Khaled Bin Abdullah Al Hogail, CEO & Managing Director of the Saudi Public Transport Company (SAPTCO), on the importance of strong and rational regulations, knowledge transfers, and unifying public and private transportation networks.
read articleInterview
Imad El-Zein, CEO, Auto World-Sixt Saudi Arabia
TBY talks to Imad El-Zein, CEO of Auto World-Sixt Saudi Arabia, on growing market share in challenging circumstances, partnering with world-class players to boost its local presence, and combining better services with lower costs.
read articleInterview
Saleh H. Al-Ghamdi, Acting CEO, Saudi Air Navigation Services Company (SANS)
TBY talks to Saleh H. Al-Ghamdi, Acting CEO of Saudi Air Navigation Services Company (SANS), on maximizing safe and effective services, effectively increasing the rate of Saudization, and easing the pathway of women into the workforce.
read articleInterview
Khalil Kutubkhanah, CEO, Jeddah Development and Urban Regeneration Company (JDURC)
TBY talks to Ibrahim Khalil Kutubkhanah, CEO of Jeddah Development and Urban Regeneration Company (JDURC), on Jeddah's unplanned settlements, the company's redevelopment projects, and its partnership model with the private sector.
read articleInterview
Dr. Khalid Bin Mohammed Al Shaibani, Deputy Minister, Planning and Health & Director of the Vision Realization Office
TBY talks to Dr. Khalid Bin Mohammed Al Shaibani, Deputy Minister for Planning and Health & Director of the Vision Realization Office, on reforms within the Ministry of Health, the corporatization of healthcare provision, and transformations in care delivery.
read articleInterview
Mohanad A. Dahlan, CEO, University of Business and Technology (UBT) Company
TBY talks to Mohanad A. Dahlan, CEO of University of Business and Technology (UBT) Company, on the evolution of the company, education investments, and upcoming sectors that will need support from the sector.
read articleFocus: Universities
Broad and Deep
As part of the continuing decentralization of higher education in Saudi Arabia, individual universities are pursuing their own paths to grow their faculties, engage with various international stakeholders, and ultimately move toward a more privatized future.
read articleInterview
Rafique Izhiman, Area General Manager KSA Jeddah, Yanbu Hotels
TBY talks to Rafique Izhiman, Area General Manager KSA Jeddah/Yanbu Hotels & General Manager, Intercontinental Hotel Group (IHG), Jeddah, on the role the firm plays in the market, expanding its footprint in the country, and expectations for 2017.
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